PMI signals growth in manufacturing and services in October

Thursday, 21 November 2024 00:30 - - {{hitsCtrl.values.hits}}

The country’s manufacturing and services sectors in October showed strong upturn, judging by the Purchasing Managers Index (PMI).

The manufacturing PMI recorded an index value of 58.1 in October 2024, indicating an expansion in manufacturing activities.

This indicates a continued expansion in manufacturing activities, at an accelerated pace relative to the previous month.

PMI compiler Central Bank of Sri Lanka (CBSL) said new orders sub-index remained elevated in October as firms continued to receive production orders for the upcoming festive season, mainly for food and beverages sector. Further, the firms had ramped up their production processes, increasing the Production sub-index during the month. “Employment and stock of purchases sub-indices showed month-on-month increases, aligned with the expansions in new orders and production,” CBSL said.

Nevertheless, suppliers’ delivery time remained lengthened during the month.

As per the respondents, the industry outlook for manufacturing activities for the next three months remains favourable, largely supported by the optimism associated with the upcoming season.

CBSL also said the services PMI indicated a further expansion in services activities in October 2024 as reflected by the Business Activity Index, which recorded an index value of 60.3.

It added that the expansion in business activities was driven by the improvements observed across most of the key sectors.

Accordingly, business activities in the financial services experienced a significant improvement, primarily driven by the existing favourable interest rates, which boosted lending activities.

Further, business activities in education, wholesale and retail trade, real estate and insurance also recorded notable improvements.

However, business activities in the IT programming, programming and broadcasting declined during the month, while accommodation and telecommunication, remained unchanged, when compared to the previous month.

“New businesses increased in October, especially due to considerable expansions in financial services activities,” CBSL said.

Meanwhile, employment and backlogs of work continued to decline in October on month-on-month basis.

“Expectations for business activities for the next three months continued to improve, at a higher rate, supported by favourable macroeconomic conditions,” CBSL added.